Cost of Seven Falls fixes rises to $8.4 million

Tuesday

Feb 12, 2013 at 8:39 PM

The "worst-case" cost of installing roads and other infrastructure at the failed Seven Falls development near Etowah has risen to $8.44 million, about $2.5 million more than the county recovered from a surety bond forfeited by developer Keith Vinson.

By Nathaniel AxtellTimes-News Staff Writer

The "worst-case" cost of installing roads and other infrastructure at the failed Seven Falls development near Etowah has risen to $8.44 million, about $2.5 million more than the county recovered from a surety bond forfeited by developer Keith Vinson.County Attorney Russ Burrell held a meeting Monday with roughly 40 people with an interest in Seven Falls, including Vinson, regulatory agency officials and roughly 25 of the subdivision's 58 individual lot owners, seeking to reach a group consensus on how to spend the bond money before turning to the courts for direction. Burrell told the group that county commissioners have agreed to give them until March 13 to set out exactly how the county should allocate $6 million in bond proceeds without subjecting the county to liability at the hands of government regulators or disgruntled lot owners. "If they show they've made some real progress in working toward an agreement, we're not going to be jerks about the deadline," Burrell said Tuesday. "But having said that, they need to show real progress or we'll have to seek another outcome."Commissioners have already given Burrell permission to file an "interpleader" action in federal court, where the county would essentially ask a judge to decide how to allocate the $6 million among the $8.44 million in potential liabilities.Those costs — updated this month by consulting engineer Bill Lapsley — include roughly five miles of roads and bridges at $2.2 million; $2.7 million in water and sewer systems; $146,700 in engineering fees; $173,300 in environmental consultant fees; and roughly $303,000 in contingency funds.Other "worst-reasonable-case" expenses Burrell outlined for the group are stream restoration and mitigation costs required by the U.S. Army Corps of Engineers and N.C. Division of Water Quality in order for those agencies to permit stream crossings on the property. The county maintains that the bond money must be used to finish road, water and sewer infrastructure and related erosion and stormwater controls. But Burrell said the county can't realistically do that work without securing a new permit from the Corps for culverting and bridging streams. The Corps revoked Vinson's 2008 permit that allowed him to install culverts and bridges along property streams after he failed to mitigate their impacts, chief of the Corps' Asheville field office Scott Jones said Tuesday. "Unfortunately, he installed most of those impacts anyway, so we requested that those illegal impacts come out," Jones said.For the county to get a new permit, the Corps of Engineers estimates it would cost about $1.13 million to purchase stream credits from the state to offset impacts of culverts and other alterations along 3,100 feet of stream within Seven Falls. But there are cheaper mitigation options, the Corps said in a Feb. 4 letter to the county.Additionally, Lapsley estimated it would cost about $200,000 to pay for stream restoration projects required by the NCDWQ in association with the Corps permits. In an interview Tuesday, Vinson said he believes the $6 million is sufficient for the county to complete the bonded work. He said developers are looking into how much of the stream was actually altered by construction, adding that he thinks it's substantially less than either Lapsley or the Corps have estimated. "We're going to cooperate with all the interested parties until we get this infrastructure complete," Vinson said.During an October public hearing on an action plan for Seven Falls, commissioners heard from a dozen concerned citizens who want the county to use the bond proceeds to clean up sediment-choked creeks and other environmental damage caused by neglected erosion controls at Seven Falls. Burrell reiterated Tuesday that the county's position is the bond can only be used to finish infrastructure promised to lot owners by Vinson. Most of the erosion bleeding into streams is coming from existing roads, he said, which the county can't fix without securing a new Corps permit and paying for off-site "stream credits" or other mitigation."If the only way is to pay (the Corps) for mitigation, that number — which has now gone up to $1.1 million — comes off the top, and that affects what we can accomplish in terms of meeting our obligations to lot owners," Burrell said, adding that could open the county up to liability from lot owners upset they didn't get all of the infrastructure covered by the bond.Jones agreed the county is "caught between a rock and a hard place." But he said the Corps is willing to work with the county on securing the necessary permits at the lowest cost possible. Scaling back the amount of impact to streams would reduce mitigation costs, he said.Burrell said he still hopes an agreement can be worked out between all of the Seven Falls parties so the county can move forward on addressing erosion issues. If the county is forced to seek a court ruling, he said "the first thing I'm going to ask for is a clear order to do the bonded infrastructure improvements," including seeding and stabilizing of eroding road surfaces and banks.Reach Axtell at 828-694-7860 or than.axtell@blueridgenow.com.